This invention relates generally to the field of interactive and automated Web-based financial transaction applications, and in particular to interactive and automated systems and methods for conducting financial transactions and managing portfolios and related financial information in capital markets.
During the evolution of the Internet, including the World Wide Web, there has been a continual introduction of applications and services to enable individuals and organizations to conduct financial research, manage their financial portfolios, and engage in certain types of financial transactions. The wide array of applications and services ranges from on-line banking to stock quote and financial information services to sites that enable users to engage in on-line, real-time market trades involving various instruments such as stocks, stock options, bonds, and mutual funds. The trading services, for example E*TRADE Securities, Inc.""s xe2x80x9cE*TRADExe2x80x9d less than www.etrade.com greater than , Charles Schwab and Co., Inc.""s xe2x80x9cSchwab.comxe2x80x9d  less than www.schwab.com greater than , and Fidelity Brokerage Services, Inc.""s xe2x80x9cFidelity.comxe2x80x9d  less than www.fidelity.com greater than , permit trading of standard instruments in recognized markets. In such services, the investor uses credit or an account set up through the trade service to engage in trades through the service""s proprietary system and interfaces. Such services, which are geared towards individual investors, do not permit seamless integration with users"" internal or back-end systems or the creation and trading of customized transactions. These services, and many others like them, do not enable trading between parties in currency derivatives or foreign exchange, or the pricing and modeling of other capital market transactions.
Some steps have been taken to tap into the potentially vast market of institutional investors wishing to engage in complex transactions via the Internet. The xe2x80x9cOpen Financial Exchangexe2x80x9d (Intuit Inc., Microsoft Corp., CheckFree Corp.)  less than www.ofx.net greater than  was created to provide a common specification for the electronic exchange of financial data between financial institutions, businesses, and consumers via the Internet that enables financial data exchange among disparate systems, in order to support online banking, bill payment and presentment, and the trading of stocks, bonds, and mutual funds. The Open Financial Exchange does not, however, provide a vocabulary, platform, and communication protocol to enable the creation, negotiation, and execution of complex, capital market transactions among financial institutions and institutional investors.
What is needed is a system and method that enables institutional investors and financial institutions to seamlessly create, price, negotiate, execute, settle and analyze complex, capital market transactions, including interest and currency derivatives, foreign exchange, loans and deposits, and fixed-income instruments, using a standard vocabulary and messaging system that enables seamless integration with the proprietary, existing systems of the users.
The present invention provides a system and method that enables users, such as xe2x80x9cMembersxe2x80x9d (e.g., institutional investors) and xe2x80x9cProvidersxe2x80x9d (e.g., financial institutions), to engage in capital market transactions, including the trading of Over-the-Counter financial products, via the Internet (including the World Wide Web). The system includes a variety of servers, applications, and interfaces that enable users to interactively communicate and trade financial instruments among one another, and to manage their portfolios. Interactive communications supported by the system include: requesting price quotes, monitoring and reviewing quote requests, issuing price quotes, monitoring and reviewing price quotes, negotiation between Members and Providers, acceptance of price quotes, reporting, portfolio management, analysis of financial information and market data, calendaring, and communications among Members, Providers, and/or system administrators, including e-mail, chat, and message boards.
The present invention also supports communications with the server side in an automated manner via an automated processor (the xe2x80x9cConnect Processorxe2x80x9d and xe2x80x9cConnect Messaging Serverxe2x80x9d). Such automated communications enable connectivity with users"" internal, back-end systems to execute automated, straight-through processing, including transaction pricing, payment scheduling and journaling, derivatives trading, trade confirmation, and trade settlement. Such communications are facilitated using a novel XML-based syntax (xe2x80x9cFinXMLxe2x80x9d) and XSL-based processing language (xe2x80x9cFinScriptxe2x80x9d). FinXML provides a standard data interchange language for capital market transactions and supports a broad set of elements and attributes that represent a wide variety of financial transactions, reference data, and market data. The common description of the FinXML syntax can be used for all aspects of straight-through-processing, including deal creation, confirmation, settlement, payment, risk management, and accounting.